N.Y. doesn't have Uber. Here's why.

Uber and Lyft's push to expand across the Empire State has been a boon to lobbyists and advertising companies, led by seven-figure spending by the companies themselves, a review of records by the USA Today Network's Albany Bureau found.

Author:
WGRZ Staff

Published:
11:50 PM EST February 11, 2017

ALBANY — Quick: What do trial lawyers, labor unions, taxi companies, local governments and the nation's largest insurers have in common?

They're all working the halls of the state Capitol hoping to sway the debate on ride-hailing apps in New York to fit their interests.

Uber and Lyft's push to expand across the Empire State has been a boon to lobbyists and advertising companies, led by seven-figure spending by the companies themselves, a review of records by the USA Today Network's Albany Bureau found.

Meanwhile, there's a spending spree battle over insurance coverage limits for the ride-hailing companies — pitting the nation's top insurers against the powerful trial lawyers in a bid to influence state lawmakers and Gov. Andrew Cuomo.

What does it mean? A stalemate over bringing the popular service to upstate New York.

For more than a year, the sides have been fighting over bill language without any resolution as the companies hope expand to Buffalo, Rochester, the New York City suburbs and beyond.

And municipalities are clamoring for a deal, saying it would bring jobs and help their local economies.

Here's a look at the various interests at play:

Uber and Lyft

Uber and Lyft, the giants of the app-driven ride-hailing industry, have been pushing for a statewide regulatory system that would allow drivers to easily cross county and municipal lines.

The companies allow users to summon a ride through a smartphone app, with drivers generally using their personal vehicles. So they're also pushing for a state law that would allow them to buy a group insurance policy for their drivers.

Uber in particular has spent heavily as it pushed to expand to the state — first to New York City, where it operates under the city's taxi laws, and now statewide.

From 2013 through 2016, Uber and Lyft spent a combined $4.4 million on lobbying expenses in Albany and New York City, according to state lobbying records. Uber did the bulk of the spending — about $3.3 million.

Trial Lawyers

The ride-hailing debate has attracted one of Albany's most potent forces: the state Trial Lawyers Association.

The New York City-based group, which represents civil trial lawyers and is a major campaign contributor, has latched on to insurance requirements in the ride-hailing debate.

Specifically, the group wants lawmakers to support higher coverage limits for ride-hailing companies, arguing that the app-based system is particularly hazardous for drivers who are checking their phones for customers.

The Republican-led Senate and Gov. Andrew Cuomo want Uber and Lyft to have $50,000/$100,000 coverage for drivers as they wait to pick up passengers, meaning the policy would cover $50,000 in injury claims per person and $100,000 in total claims per accident.

The Trial Lawyers Association wants much higher limits: $100,000/$300,000, which would force insurance companies to pay out more in major accidents.

When a driver is on the way to pick someone up, the trial lawyers want $1.5 million in coverage — or $500,000 more than Cuomo and the Senate have proposed.

“While (ride-hailing companies) present business opportunities, legislators must take caution to ensure that New Yorkers are protected as employees, passengers and pedestrians,” the association wrote in a January memo distributed to lawmakers.

The Trial Lawyers Association invests heavily on lobbying in New York, spending $4.2 million from 2013 to mid-2016. Unlike Uber, however, the group’s lobbying spans a wide array of issues related to civil cases.

The Democrat-controlled Assembly is expected to unveil its ride-hailing proposal in the coming weeks.

It’s likely to include higher insurance limits than Cuomo and the Senate's proposals, as a bill from Assembly

Insurance Chair Kevin Cahill, D-Kingston, did last year.

Insurance companies

Insurers are on the opposite side of the debate: They're trying to limit the amount they would have to pay out in accidents.

No fewer than a dozen insurance companies have lobbied on ride-hailing in New York, according to state lobbying records.

That includes the New York Insurers Association, a trade group representing insurance providers, and some of the biggest names in the insurance industry: Nationwide, State Farm and Allstate among them.

The Insurers Association backs the limits in the Senate bill, which is sponsored by Senate Insurance Chair James Seward, R-Milford, Otsego County.

It has pushed back against the types of limits pushed by the Trial Lawyers Association, warning they could drive up costs for customers.

"Mandating these excessively high levels of liability limits could lead to additional costs for (ride-sharing) services and may even make it too expensive in portions of New York," the Insurers Association wrote in a memo last year.

The debate has led to finger pointing.

Cahill insists the Trial Lawyers Association hasn’t influenced his position on ride-hailing, accusing Uber of spreading a narrative impugning his intentions.

Uber has “perfected the art of the alternative fact,” Cahill said.

“Clearly, that’s been the way that they’ve been advancing their cause,” Cahill said. “That doesn’t mean we don’t share the same goal, but their approach leaves a lot to be desired.”

Anfang fired back, saying New Yorkers have been “demanding ride-sharing in their communities for years.”

“Now it's up to the Assembly to listen to New Yorkers over NYC special interests,” she said.

Municipalities

Among the others closely watching the Uber debate: Local governments.

One issue at play for municipalities is taxes.

Cuomo's proposal would impose a 5.5 percent tax on Uber and Lyft trips. Most of that would go to the state, with about a fifth reserved for local public transportation systems.

Those trips wouldn't be subject to sales tax. That means counties across the state wouldn't receive sales-tax revenue from ride-hailing trips. In New York City, the companies pay state and local sales tax.

Cahill said the Assembly's proposal will likely preserve some sort of authority for local governments.

Cuomo's proposal and the Senate bill requires the state — and not local governments — to regulate the ride-hailing industry.

Local leaders have pressed for the industry upstate.

"Upstate cities are undergoing a revitalization but that can’t continue unless we have the most basic services that nearly every other city in the U.S. enjoys," they wrote in a letter circulated by Uber in December.

They are hoping to push back against ride-hailing competition and urging lawmakers to support tougher background inspection requirements for potential drivers.

They've warned that allowing Uber and Lyft, which often rely on part-time drivers, could irreparably harm the taxi industry, which relies more on full-time drivers.

The Upstate Transportation Association, a coalition that includes upstate taxi companies, has a $5,000 a month lobbying contract with Bolton St. John, a major New York lobbyist.

“When Uber’s promises on driver earnings don’t come true, New Yorkers will look at the lawmakers who rushed a flawed bill and replaced full-time jobs with a gig economy that doesn’t feed families," John Tomassi, president of the Upstate Transportation Association, said in a statement.